Even when you’re doing everything possible for an injured worker, a successful return-to-work transition can be jeopardized when a treating physician isn’t attuned to the ins and outs of the worker’s job.

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“It’s helpful for physicians to know the demands for a position,” said Trish Elizalde, a branch manager for Genex Services. Elizalde served as a case manager for 10 years.

“A job description helps a doctor visualize what the worker does on the job and it helps physicians facilitate return-to-work decisions that help get injured workers back to the jobsite while keeping them safe from reinjury.”

Playing an integral role in the healing process, physicians assess injured workers’ impairment, create treatment plans and administer care where needed. They also provide employers and other third parties with updated information on the worker’s progress.

If they lack the knowledge and understanding of a particular job, they could keep a worker at home unnecessarily, delaying the healing process. Worse, they might send a worker back to the grind too soon — the perfect recipe for a second serious injury and prolonged recovery.

It’s in the Details

It may seem like a small piece to the overall claims puzzle, but “job descriptions are huge,” said Elizalde.

By knowing what an injured worker does day-in and day-out, from lifting requirements to frequency of tasks, a physician is better suited to set restrictions while introducing an injured worker back to their job.

Trish Elizalde, branch manager, Genex Services

“An accurate job description assists the treating physician in making decisions about whether an injured worker is able to return to work in any capacity,” she said. “They welcome this information.”

A seasoned case manager, Elizalde said that nurse case managers (NCMs) gather this vital information from employers before conducting site evaluations, breaking down the physical aspects of a worker’s job.

“We strive to obtain a job description on every case. [Case managers] know the right questions to ask and what the physicians are looking for in terms of the physical demands of a position.”

Through this information, the hope is to gain enough insight to maximize and speed recovery. A thorough job description answers how much weight is lifted, how often and for how long. Do employees lift objects from the floor? Is it to waist height or overhead? How far does an employee carry an object, and do they use the assistance of a lifting device?

In addition to lifting, the form documents how long an employee sits or stands, if they bend or squat, or climb stairs or ladders.

“Some activities might be observed once while others might be observed over a longer period of time,” Elizalde said. “We estimate what percentage of their workday is engaged in a particular activity. We note if they worked with machinery, hand-held tools, operated motor vehicles or if they were indoors or outdoors in varying temperatures.

“The extent of the details we gather is to provide the best physical description of the job to ensure the injured worker’s safe return to work and to avoid further injury or exacerbate the current injury.”

Time constraint is the most common reason why an employer may not have a job description handy for a case manager, said Elizalde. And she understands why: “Employers are very busy, but we are finding that employers are becoming more engaged, and we appreciate that.”

There are also employers, she said, who understand the importance of an accurate job description and the value that it adds to a workers’ compensation program. These employers have “invested time to establish a bank or database of job descriptions,” over time.

Elizalde added, “Our case managers certainly try to provide information to employers about how job descriptions are used by physicians to make return-to-work decisions. If we feel the job description is incomplete or if there are questions regarding an aspect of the position, we contact the employer to ask additional questions or suggest an onsite visit.”

During a site visit, NCMs conduct an evaluation of an injured worker’s job requirements. They may speak with others doing similar tasks to see what the injured employee might be doing upon returning to work. Elizalde called this the “parts of the job not talked about” — that is,

minúte details of a position that aren’t included in a broad job description.

However, said Elizalde, having a case manager enter an active construction site or power plant — where there is high risk of injury due to heavy machinery — can set employers on edge, with safety becoming a concern once again.

But getting in and getting that job description is vital to the process.

“Most of our case managers have safety hats and boots in their car. They’re prepared for anything,” she said.

Return to Work

Through the job description, physicians can learn the aspects of a job. Workers are often asked to review job descriptions submitted to their physicians as well, guaranteeing accuracy.

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In addition to getting feedback from the injured worker, NCMs make sure they are communicating with the employer during the road to recovery. Case managers work with the physician and employer to find temporary or partial duty tasks that injured workers can perform until they are ready to return fully recovered.

“We want to get the [injured worker] out of their house, get them moving, get them back to normal.” Elizalde said. “Some employers don’t even know that they can bring back a worker on modified duty.”

Much like the information NCMs provide to an adjuster, she said, case managers will update the employer on their worker’s status to keep them engaged in the claims process.

“We find that when an employer is engaged in the comp process, employees have better results. We’re happy to lend our expertise to assist employers in creating a job description when one is not available, as well.” &

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

Cyber risk continues to be the amorphous and seemingly indefensible threat facing businesses of all types and sizes, and insurers are continually tailoring their policies to respond to the changing environment. Making the challenge more difficult is the fact that cyber no longer is constrained to breaches of network security that imperil private information.

Cyber threats now intermingle with other types of exposure, like employee theft and professional liability, and can cause a broader spectrum of loss including property and reputation damage.

“We’re seeing a change now where the malicious actors aren’t just hacking networks to steal information; they’re reaching out from the digital world to cause different types of damage,” said Elissa Doroff, vice president, underwriting and product manager, XL Catlin.

As cyber becomes the root case of various types of tangible damage, it raises questions around what policies will be triggered by an event involving both digital and physical damage, and raises the potential for both gaps and overlaps in coverage.

Here are the top five ways cyber risk is evolving to create gray areas in existing insurance coverages:

1. Infiltration of Industrial Systems Leads to Property Damage

Hackers’ ability to breach a corporate network through various channels is nothing new. But when the intent is to cause physical harm rather than steal data, they can find their way into the industrial controls that operate a facility and wreak havoc.

In 2014, cyber criminals sent a German steel mill up in flames by speeding up the machinery until it became too hot and eventually exploded. The following year, bad actors brought down the Ukrainian power grid through similar methods.

A property policy responds to the resulting physical damages from such an incident, regardless of the cause. But the physical damages are just one piece of the attack.

The targeted organization will also have to investigate how the hackers gained access to their systems and whether they stole or altered any data in the process. The costs of a forensic investigation, restoration of data, notification and any other third-party liability exposures would not be covered under a property policy.

“A cyber policy would respond to network issues like theft of PII or use of transient malware that causes damage to a third party,” Doroff said. “And it would include the first-party coverages to remediate the network breach itself.”

Without a cyber policy, any incident of physical property damage caused by a cyber event would only be partially covered.

2. IoT and Bitcoin Amplify Ransom Risk

“On average, the claims didn’t exceed $50,000. You paid the ransom if you needed to. More sophisticated organizations with good backups knew that they would be safe without paying, so they could just wait for the hacker to go away,” Doroff said.

But the problem is no longer that easy to solve. The explosion of devices connected via the Internet of Things has created more access points to corporate networks.

“When workers connect with their phones outside of a VPN, it may not be bifurcated from the corporate network that has a higher level of security,” she said. “It opens the door for new strains of malware.”

The rise of bitcoin also drives up the ransom amounts sought by hackers. More thieves are asking for their payment in cryptocurrency, which continues to rise in value. This is why having a cyber insurance policy with access to the right breach response vendors is critical.

Since bitcoin is not readily ascertainable on the open market, insureds need access to forensics vendors that maintain a bitcoin wallet. When a ransom is demanded in bitcoin, the vendor can quickly respond to facilitate the transaction and the insured back to business as soon as possible.

“Cyber extortion claims are not $50,000 anymore. With the increase in bitcoin’s ubiquity and value, the cost of a ransomware attacks today can double or triple that amount,” Doroff said.

Where coverage for cyber extortion was once considered a throw-on to a cyber policy, it’s now a critical must-have. Cyber liability insurance without coverage for extortion could leave targets with insurmountable losses after an attack.

3. Social Engineering Expands Definition of Theft

Hackers have become adept at mimicking professional emails to request fraudulent transfers of funds, posing as a client or vendor, or sometimes as a senior manager making a request of a subordinate. Often, the employee tricked into sending the cash doesn’t realize the mistake until it’s too late, and both the thief and the money are long gone.

“That type of theft has created a gap in the insurance market when it comes to treatment of financial fraud,” Doroff said.

A fidelity and crime policy typically would not cover a loss stemming from a social engineering scheme because the funds ultimately were willingly transferred away, even if the employee that did so was deceived. Crime policies may only extend coverage to outright theft of money or securities.

“There has been a push in the marketplace to offer coverage for social engineering fraud within cyber policies, but most of the coverage that exists now is offered on a sub-limited basis,” Doroff said.

As cyber thieves find new ways to bilk businesses, a cyber policy with coverage for social engineering fraud in combination with a crime and fidelity policy closes the coverage gap for emerging types of theft.

4. Data Breaches Threaten Company Reputations

Plenty of high-profile breaches demonstrate how a cyber attack can cause the public to lose faith in an organization they trusted with their personal information. Target, Equifax, Yahoo and Uber are just a few examples.

“Adverse publicity will cause a loss of brand trust that negatively impacts sales, but measuring that impact is the difficult part of designing coverage,” Doroff said. Quantifying exposure is the barrier to developing coverages that adequately address the reputation risk of cyber breaches — but a few methods are emerging.

“We’ll look at a company’s sales over a six-month period after an incident and compare that to the previous year, which provides a snapshot of how much revenue they’ve lost that’s likely attributable to the cyber event,” Doroff said.

But, she added, quantifying the loss is not an exact science. Along with a comparison of sales and revenue, a more thorough financial audit conducted by forensic accountants may be needed. Each carrier will have their own preferred method for measuring reputation exposure.

Because most cyber policies on the market today don’t address this exposure at all, it’s best to work directly with underwriters up front to determine whether there is coverage for financial losses from reputation damage, and how those losses will be accounted for.

5. Storage of Sensitive Data Increases Professional Liability Risk

While theft of PII has always posed a significant threat to financial institutions, hospitals, and other organizations that house large amounts of customers’ private data, some firms previously less concerned with cyber risk are finding that they may have targets on their backs as well.

“This comes up often with professional services firms like attorneys’ offices or financial consultants,” Doroff said. “They have a duty to keep clients’ sensitive information secure. If there’s some third-party incident whereby their clients’ information gets out, they could face costly lawsuits.”

While a professional liability policy likely covers those legal expenses, it won’t cover the first-party losses related to the breach itself, including the investigation, notification and remediation expenses. For more and more firms, “It’s not sufficient to rely on your E&O coverage,” Doroff said.

Staying Ahead of the Coverage Curve

As cyber risks and responding coverages continue to evolve, companies are best served by working with a carrier at the forefront of cyber underwriting. XL Catlin’s cyber and technology liability policy addresses the varying ways in which malicious hackers can infiltrate systems or otherwise cause harm.

“We built this policy based on all the endorsement requests we received from brokers, which meant changing some definitions, removing certain exclusions or broadening some insuring agreements,” Doroff said. “The result is a policy with very broad terms and conditions that is a market leader in terms of what brokers and insureds are looking for.”

“Our services include everything from training articles and videos to tabletop exercises, testing of employees’ response to phishing emails, and an 800-number manned by our claims team,” Doroff said. “Our broad vendor panel also offers several options for law, public relations and forensic firms, to help insureds recover quickly from a cyber incident — whatever shape it takes.”

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with XL Catlin. The editorial staff of Risk & Insurance had no role in its preparation.

XL Catlin. From insurance to reinsurance, a changing world needs new answers. We’re here to find them. With an incredible blend of people, products, services and technology, we have the power to find innovative, creative solutions to your risks — from the most familiar to the most complex.

A growing number of Americans earn their living in the gig economy without employer-provided benefits and protections such as workers’ compensation.

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With the proliferation of on-demand services powered by digital platforms, questions surrounding who does and does not actually work in the gig economy continue to vex stakeholders. Courts and legislators are being asked to decide what constitutes an employee and what constitutes an independent contractor, or gig worker.

The issues are how the worker is paid and who controls the work process, said Bobby Bollinger, a North Carolina attorney specializing in workers’ compensation law with a client roster in the trucking industry.

The common law test, he said, the same one the IRS uses, considers “whose tools and whose materials are used. Whether the employer is telling the worker how to do the job on a minute-to-minute basis. Whether the worker is paid by the hour or by the job. Whether he’s free to work for someone else.”

Legal challenges have occurred, starting with lawsuits against transportation network companies (TNCs) like Uber and Lyft. Several court cases in recent years have come down on the side of allowing such companies to continue classifying drivers as independent contractors.

Those decisions are significant for TNCs, because the gig model relies on the lower labor cost of independent contractors. Classification as an employee adds at least 30 percent to labor costs.

The issues lie with how a worker is paid and who controls the work process. — Bobby Bollinger, a North Carolina attorney

However, a March 2018 California Supreme Court ruling in a case involving delivery drivers for Dynamex went the other way. The Dynamex decision places heavy emphasis on whether the worker is performing a core function of the business.

Under the Dynamex court’s standard, an electrician called to fix a wiring problem at an Uber office would be considered a general contractor. But a driver providing rides to customers would be part of the company’s central mission and therefore an employee.

Despite the California ruling, a Philadelphia court a month later declined to follow suit, ruling that Uber’s limousine drivers are independent contractors, not employees. So a definitive answer remains elusive.

The motive for companies seeking the contractor definition is clear: They don’t have to pay for benefits, said Meneghello. “But from a legal perspective, it’s not so easy to turn the workforce into contractors.”

“My concern is for individuals who believe they’re covered under workers’ compensation, have an injury, try to file a claim and find they’re not covered in the eyes of the state.” — Matt Zender, vice president, workers’ compensation product manager, AmTrust

It’s about to get easier, however. In 2016, Handy — which is being sued in five states for misclassification of workers — drafted a N.Y. bill to establish a program where gig-economy companies would pay 2.5 percent of workers’ income into individual health savings accounts, yet would classify them as independent contractors.

Unions and worker advocacy groups argue the program would rob workers of rights and protections. So Handy moved on to eight other states where it would be more likely to win.

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So far, the Handy bills have passed one house of the legislature in Georgia and Colorado; passed both houses in Iowa and Tennessee; and been signed into law in Kentucky, Utah and Indiana. A similar bill was also introduced in Alabama.

The bills’ language says all workers who find jobs through a website or mobile app are independent contractors, as long as the company running the digital platform does not control schedules, prohibit them from working elsewhere and meets other criteria. Two bills exclude transportation network companies such as Uber.

These laws could have far-reaching consequences. Traditional service companies will struggle to compete with start-ups paying minimal labor costs.

Opponents warn that the Handy bills are so broad that a service company need only launch an app for customers to contract services, and they’d be free to re-classify their employees as independent contractors — leaving workers without social security, health insurance or the protections of unemployment insurance or workers’ comp.

That could destabilize social safety nets as well as shrink available workers’ comp premiums.

A New Classification

Independent contractors need to buy their own insurance, including workers’ compensation. But many don’t, said Hart Brown, executive vice president, COO, Firestorm. They may not realize that in the case of an accident, their personal car and health insurance won’t engage, Brown said.

Workers’ compensation for gig workers can be hard to find. Some state-sponsored funds provide self-employed contractors’ coverage. Policies can be expensive though in some high-risk occupations, such as roofing, said Bollinger.

The gig system, where a worker does several different jobs for several different companies, breaks down without portable benefits, said Brown. Portable benefits would follow workers from one workplace engagement to another.

What a portable benefits program would look like is unclear, he said, but some combination of employers, independent contractors and intermediaries (such as a digital platform business or staffing agency) would contribute to the program based on a percentage of each transaction.

There is movement toward portable benefits legislation. The Aspen Institute proposed portable benefits where companies contribute to workers’ benefits based on how much an employee works for them. Uber and SEI together proposed a portable benefits bill to the Washington State Legislature.

Meneghello is skeptical of portable benefits as a long-term solution. “They’re a good first step,” he said, “but they paper over the problem. We need a new category of workers.”

A portable benefits model would open opportunities for the growing Insurtech market. Brad Smith, CEO, Intuit, estimates the gig economy to be about 34 percent of the workforce in 2018, growing to 43 percent by 2020.

The insurance industry reinvented itself from a risk transfer mechanism to a risk management mechanism, Brown said, and now it’s reinventing itself again as risk educator to a new hybrid market. &

Susannah Levine writes about health care, education and technology. She can be reached at [email protected] Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

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